LONDON: Copper prices rose on Thursday, supported by stronger appetite for risk across financial markets, while aluminium hit a near two-week high after Australia’s South 32 confirmed that it would wind down a smelter in Mozambique.
Benchmark three-month copper on the London Metal Exchange added 0.5percent to USD13,237 a metric ton in official open-outcry trading after edging up by 0.5percent on Wednesday.
Volatility in LME copper has declined since the contract hit a record peak of USD14,527.50 a ton on January 29, fuelled by speculative buying.
The price is still up 35percent over the last six months. “It’s been a very bumpy ride, but right now the focus is probably mostly on position squaring,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. “We’re heading into a quiet period for the Lunar New Year, so it’s a question of the level of positions speculators in China want to carry into this period.” Physical demand has fallen in China, the world’s top metals consumer, ahead of its nine-day Lunar New Year break starting February 15 when economic activity stalls.
The most-active copper contract on the Shanghai Futures Exchange was up 0.4percent to close daytime trading at 102,330 yuan a ton. Aluminium was the best performer on the LME, climbing 1.4percent in official activity to USD3,145.50 a ton, its strongest since January 30, after Australia’s South32 S32.AX reaffirmed it would put its Mozambique aluminium plant on care and maintenance next month after a drought hit power supply. “Attention has really turned to the aluminium market where the options markets have seen predominantly bullish trades,” broker Marex said in a note.
Buoyancy from other markets spilled into metals as Asian and European stock markets hit record highs. LME nickel slipped 1.2 percent to USD17,660 a ton on profit-taking, having jumped 2.2 percent on Wednesday after Indonesia sharply cut this year’s mining quota for PT Weda Bay Nickel, the world’s biggest nickel mine.
Among other metals, LME zinc rose 0.3percent to USD3,417 a ton, lead edged up 0.2percent to USD1,996 while tin shed 1.2percent to USD49,050.
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